Dutch shipping finance house Nesec has launched a new vessel fund worth €250m ($275m) for domestic and other European Union-based owners to help fill the gap left by the pull-back of traditional banks.
The cash is aimed at financing newbuildings, ship modifications and secondhand deals in the short-sea sector, which it called the most important for Dutch owners.
The Nesec Shipping Debt Fund (NSDF) is backed by the Dutch government's Ministry of Economic Affairs and Climate Policy.
Rotterdam-based Nesec has received capital commitments from NWB Bank and the province of Groningen.
The fund also has support from NN Investment Partners and Waterland Investment Services clients.
The NSDF will offer a portfolio of loans backed by mortgages on the vessels.
First-priority lending
Managing director Pieter van der Burg told TradeWinds that as a private fund, the number of vessels it already finances - and the total amount of money involved - is confidential.
He added that until recently it provided second-priority mortgage-backed subordinated loans to North-West European shipowners as an alternative to banks.
It now intends to offer first-priority mortgage-backed finance to owners of shortsea vessels, to "basically supply what used to be classic ship finance," he added.
"In this way we are an addition to what banks have to offer."
The fund excludes boxships, but applies to other vessels of less than 18,000 dwt.
"By using data-analysis and selection criteria, a diversified portfolio arises," Nesec said.
Risks reduced
The portfolio approach and the state guarantee reduce the loss risk, while maintaining an attractive return, the financier added.
Certain sector and vessel-based criteria will be applied to shipowner applicants.
"As a result of changing regulations, traditional financiers do not have the appetite to provide long-term loans backed by ships," Nesec said.
"NSDF could be the answer to the reduced availability of credit, as it connects credit needs of shipowners to the desire of institutional investors by providing mortgage-backed shipping loans."
Talks with prospective shipowning clients will include the earning capacity of a proposed acquisition, the activity of the ship, and the organisation and management of the business.
Nesec will maintain regular contact with the shipping companies involved, checking on ship performance and what the market expectations are in the near future.
The company said it expects to create further debt funds aimed at maritime and offshore assets, as well as renewables, in the future.
Nesec has been active as a lender to shipowners since 1946, providing long-term credit for ship acquisitions.
Nesec was founded by six shipyards with the dual purpose of promoting the export of Dutch-built ships and providing subordinated loans to shipowners.
